As you go about your business today, you may think you enjoy relative anonymity and privacy. Not so. In fact, Britain's virtual net curtains are twitching as never before, with new technology adding even greater prying power to the country's one million surveillance cameras.

In the past, tracking the movements of the population at large has been impractical - it took a lot of effort and manpower just to watch what one person was up to.

But, along with the government's acquired abilities to track its citizens as they move about the internet through the Regulation of Investigatory Powers Act, computerisation means we can also be tracked in the material world.

Moreover, it can be done cheaply, with increasing accuracy and almost invisibly. Your mobile phone constantly gives your approximate position. More precisely, you can be watched walking the streets, your car is (routinely) tracked along major roads, and card-based transactions leave a virtual paper trail.

On the front line, catching all who cross their gaze, are surveillance cameras, of which Britain has more than any European country. Most, at the moment, are connected to video-tape recorders. But computerisation is coming, allowing cameras to "recognise" a face in a crowd.

In 1998, the London borough of Newham connected the US firm Visionics' software to cameras covering one shopping area, and this year will extend the system to its fifth. With the face-recognition software, Bob Lack, group leader of security services, says Newham has improved crime rates relative to other boroughs. "In street robberies and burglaries in particular, we've seen a dramatic drop," he says (although some academics say that cameras merely displace criminals to other locations or activity).

The system tries to match faces on Newham's cameras to a "watch list" of between 100 and 150 active criminals, chosen by a Metropolitan Police committee. The software shows probable matches to a Newham employee - who does not see the suspect's name, criminal record or the likelihood of the identification being correct. The operator decides if the match is valid and whether or not to contact the police. The pictures can even be passed on electronically.

"We don't build a database of where people are," says Tim Pidgeon, Visionics' business development director. He says that would breach the Data Protection Act, as it is illegal to build a database on the activities of the public.

But business appears to be booming. Visionics has tried the system with a different watch-list - of known football hooligans - at a West Ham match against Manchester United in January last year. And other local authorities are considering the system, which costs from £15,000 to scan a single camera feed and uses standard surveillance cameras.

Some ports and airports have joined Newham. BAA told Guardian Online that unofficial trials were held at Stansted airport by a "control authority", but would not give further details.

According to some, there are far better ways than face scanning to track "suspect" citizens. "Number-plate recognition is far more accurate and user-friendly," says William Webster, a lecturer in public management at Stirling University.

Automatic number plate recognition (ANPR) arrived in the UK in 1997, when the City of London police installed cameras that scan the plates of every vehicle entering and leaving the Square Mile - a concept dubbed the ring of steel. "The cameras are very overt. It's all very open," says a police spokesperson. "We're not interested in monitoring people's movements, we just want to provide them with a safe environment."

Other forces using ANPR include the Metropolitan Police, West Midlands, Thames Valley, Cumbria and Avon & Somerset. Some use fixed cameras, some mobile units in vehicles, while others won't say.

Unlike Newham's controlled watch list, ANPR checks plates against live databases: Avon & Somerset's vehicle-mounted system refers to a local list, the police national computer in Hendon and the Driver and Vehicle Licensing Agency in Swansea. Data protection rules prohibit building general databases, so these systems don't retain computerised data. They simply alert police if they read a suspected vehicle's plate - although the City of London force retains the videotapes for several months.

The traffic information provider Trafficmaster plc owns a far more widespread plate-reading system, with 8,000 cameras on trunk roads to monitor traffic speeds (its motorway cameras use a different system). The cameras, normally an eye-catching blue, cut the first two and last single digits of your plate, and transmit the remainder to Trafficmaster's headquarters in Milton Keynes. By watching for the same partial plate number further up the road, the firm gauges traffic speed.

However, Trafficmaster says its cameras misread about one plate in four - good enough for traffic speeds, but not for criminal investigations. "Police authorities have phoned about armed robberies, and we haven't been able to help," says a spokeswoman Claire Schofield. She adds that Trafficmaster's licence prohibits it from cross-referencing the number plates. Most of the incoming data is rapidly dumped, and only four or five people have access to the camera feeds, she says.

Ian Brown, a researcher in computer security at University College, London points to an even simpler way to track citizens. "Imagine the uproar if, five years ago, the police had suggested everyone should carry around a personal location detector at all times," he says. "In five years' time, people will be accepting just this."

Bringing about that change is the near ubiquitous mobile telephone. At the moment, when switched on, the units transmit their identity. Base stations within range and with capacity reply, and the phone "handshakes" - logs on to - one of those stations, the call strength indicator on the mobile goes up and you can make calls.

But, as a result, your network always knows roughly where you are, if the phone is switched on.

BT Cellnet already uses base-station data to provide relevant traffic news, and believes it is accurate to 100 metres in cities, although that accuracy falls to within 15 kilometres or more in the countryside, because of the smaller numbers of base stations. "If we're required to give evidence for court, we are only able to say the person was within 35 kilometres," says John Cross, head of network security for the firm.

That is because mobile phones will not necessarily log in to their nearest base station. Weather conditions, local topography and cell congestion mean a phone may connect to a base station further afield, he says. "We get requests from the emergency services for greater accuracy, but we just can't do that."

UCL's Brown argues that mobiles can be traced to within tens of metres in cities, by measuring its distance from three or more base stations through timing delay on signals, and using a technique called triangulation. BT Cellnet's Cross says this is possible but very difficult: digital mobile phones link to only one base station at a time, and signal distortion by weather or geography would often ruin such calculations.

He adds that location data is retained for a few months, but only a handful of people can see it, although the network will pass the information to the police. Orange says it operates similar policies, holding location data for six months, releasing it only under a formal Data Protection Act order from law enforcers or solicitors, or by order of a court.

That information could become more accurate. Third-generation mobile phones will increase location accuracy to within tens of metres worldwide, using satellite-based global positioning system (GPS) technology. You could find yourself getting text messages advertising shops you are passing. Meanwhile, your network will be keeping extremely accurate tabs on you.

Banks, too, will pass on location data under order. Cash machine usage and electronic card transactions let a bank locate you - or at least your card - with precision at the time of transaction.

As with the mobile phone networks, the location information is invisible to call-centre operators. Martin Whitehead, head of information security for Co-operative Bank, says he operates a "need-to-know" policy: about a dozen people have access to the exact time and location of cash-machine transactions. However, he and other bankers are concerned about the social security fraud bill going through the House of Lords. This could grant the Department of Social Security (DSS) and its local authority agents wide-ranging access to bank records.

"It won't include people's names, but it may have identifying data," says Caspar Bowden, the director of the think-tank, the Foundation for Information Policy Research.

Whitehead says he fears the worst if the DSS gets wide access. "We've been the subject of fishing expeditions [wide-ranging "trawls" for data] from the DSS and local government agents," he says, adding that the bank has refused access - but may not be able to under this bill. He says there should be reasonable suspicion of fraud before a customer's information is surrendered.

The UK has the physical infrastructure for near-Orwellian surveillance, with one million cameras, several thousand number-plate readers, and the majority of the population carrying mobile phones and using transaction cards. It is only laws such as the 1984 and 1998 Data Protection Acts that stop this infrastructure being used to its full invasive capacity.

Collecting and cross-referencing population-wide intelligence has been suggested elsewhere. Last December, the Observer uncovered a memo by Roger Gaspar, the National Criminal Intelligence Service's deputy head, saying the government should retain the details of every phone call made, every email sent, and every web-page viewed - for seven years.

The government said it had no plans to implement this scheme. But with the political parties scuffling to appear toughest on crime, how long before such generalised, cross-referenced surveillance is mooted for the material world?

Is it easy to travel without being detected? Could an individual, with enemies able to access any computerised system, avoid automated detection while travelling from, say, Glasgow to London?

First, he or she should use cash. Credit or debit cards leave a detailed electronic trail, mostly fed to central systems in real time. A mobile telephone's location is tracked, but an unregistered pre-paid mobile could solve this - as could robbery. Police think that phone theft is one of the main contributors to the recent rise in violent crime.

Travelling south by road could be tricky. Several police forces en-route, such as Cumbria, West Midlands and the London Met, use automatic number plate recognition cameras, to check vehicles against central databases. And the fugitive may want to avoid A-roads, if suspicious that the Trafficmaster network of number plate-readers could be subverted.

So perhaps it would be safer to take public transport: train tickets can be purchased with cash, without identification. Surveillance cameras are used at stations, but the British Transport Police, who monitor the output, says it does not employ face recognition software, and Virgin Trains says its trains do not have cameras, although new ones will. Of course, using the West Coast mainline exposes our fugitive to other risks - such as lengthy delays just outside Preston.